CME cattle and feeder cattle futures Tuesday rebounded from earlier losses and settled higher as prospects for cash price gains improved.

December live cattle settled 0.07 cent a pound, or 0.08%, higher at $1.0285 while February was up 0.57c, or 0.55%, at $1.0580. January feeder cattle were up 0.62c, or 0.52%, at $1.2135 and March was up 0.80c, or 0.65%, at $1.2297.

Traders said reports of bids by packer buyers in the Plains at $1.01 a pound on a live basis were one cent above the bulk of last week's trading, hinting there might be at least a little cash-market strength this week. So far, no trading has been reported, however, as feedlots pass the bids.

The bounce countered overnight worries about extensive deliveries pressuring the December contract, which took futures prices down in overnight trading and in the early rounds of the pit session. However, Don Roose, president of U.S. Commodities, said delivery concerns reappeared later and trimmed most of the December contract's gains by the close of pit trading.

The CME Group reported deliveries of 30 contracts Monday, and while the number of cattle represented by 30 contracts isn't large when compared with a week's worth of cash cattle business, it reminded futures traders of the risk of having to accept delivery.

Most investors with long positions in cattle futures aren't able to accept delivery of cattle. Those with short positions are the ones who decide when the expiring contract is enough above the cash price to make it more profitable to deliver cattle than to sell in the cash market.

The CME Clearinghouse allocates deliveries to the oldest long contracts, so the only sure way of avoiding delivery is to exit the long position before expiration. The CME reported Tuesday morning that there were 10,952 December contracts still open, and traders said there was some work to do before the contract expires on Dec. 31.

Feeder cattle rose, supported by higher prices in the deferred months in live cattle futures, which tells traders the industry would be compensated for the higher cost of the young feeder cattle by the time they are ready for slaughter.

Higher grain prices generally were ignored by feeder cattle traders who preferred to focus on the higher live cattle futures.

The USDA at midday reported its wholesale choice composite boxed beef carcass price was down $0.40 a hundred pounds at $159.62, while select beef was up $0.84 at $153.10. The volume of steaks and roasts sold was 107 loads, and there were 39 loads of trimmings and coarse grind product reported.

Urner Barry's Yellow Sheet, a trade publication, at midday said boxed beef spot market demand was fair, as buyers focused less on immediate needs and more on post-holiday shipments. The market remains weak for holiday cuts while many of the end cuts, from which roasts are cut, moved higher. Similar gains were reported for ground beef.

-By Lester Aldrich, Dow Jones Newswires; 913-322-5179;